Snus and moist snuff

Swedish Match has a market leading position in the Scandinavian snus market. In the US, Swedish Match is well positioned as the the third largest manufacturer of moist snuff and is a significant player in the market for snus and non-tobacco nicotine pouch products.

In Scandinavia, Swedish Match has experienced growing snus volumes in both the Swedish and Norwegian markets in 2017. On the US moist snuff market, the Company offers attractive alternatives in two of the fastest growing formats – pouches and tubs. In the US, the snus market continued to grow, and Swedish Match has outpaced the market. While the market for nicotine pouches without tobacco is relatively new, the volume development for the Company’s products is promising.

Key data, MSEK201720162015
Sales5,4835,2775,090
Operating profit2,3572,1972,071
Operating margin, %43.041.640.7

 

Swedish Match shipment volumes, millions of cans20172016Change, %
Snus, Scandinavia1)247.6241.33
Moist snuff, US127.4131.4-3
Snus and nicotine pouches, outside Scandinavia1)13.27.870

1) Includes V2 Tobacco snus volumes from date of acquisition.

 

Share of Group total:
Sales: 34%
Operating profit: 54%

Main brands:
Sweden
Snus:
 General, Göteborgs Rapé, Kaliber, Kronan, Ettan, Grov, Catch 
Nicotine pouches without tobacco: ZYN
Pouch products with neither nicotine nor tobacco: Onico

Norway
Snus:
 General, G.3, The Lab, Nick & Johnny
Pouch products with neither nicotine nor tobacco: Onico

US
Moist snuff: Longhorn, Timber Wolf  
Snus: General
Nicotine pouches without tobacco: ZYN

Main markets:
Sweden, Norway, the US

Production units:
Sweden, the US

Strategy

Swedish Match’s vision is of a world without cigarettes, providing consumers enjoyable alternatives that are both satisfying and dramatically safer than smoking. Smokeless alternatives, including snus and moist snuff, as well as innovative products (such as nicotine pouches without tobacco) are an important part in moving toward the vision. As snus consumption grows, cigarette consumption declines. In Scandinavia, consumer preference for snus versus cigarettes has increased over the years, especially among younger adults in Norway. Swedish Match is dedicated to further developing the growing snus categories in Scandinavia, the US, and potentially other markets, thereby contributing significantly to improved public health.

The Company’s major competitive strengths include its superior quality products, in depth know-how, and ability to quickly adapt to evolving consumer needs. The Company’s strengths also include offering both traditional and innovative high quality products with both well established and new brands, and its capabilities in the areas of analyzing the needs of consumers, conducting research, and servicing customers.

Swedish Match will leverage its unique Snus and moist snuff platform, and continue to innovate and develop new and improved products with outstanding quality and value. Swedish Match will endeavor to drive category growth and maintain its leading position in Scandinavia. It will also work to develop the snus and nicotine pouch categories in the US and establish a strong presence in the market. Swedish Match will work to build on its position in the US moist snuff market, targeting the faster growing segments. The Company will explore opportunities for Swedish snus and other innovative smokeless products in both existing and new markets.

Financial development

(Note: Comments below refer to the comparison between full year 2017 vs. full year 2016).

Sales for the product area grew by 4 percent in local currencies. Operating profit increased to 2,357 MSEK (2,197) and included net operating result for snus and nicotine pouches outside Scandinavia of negative 167 MSEK (negative 232). The improved operating profit was driven by growth in Scandinavia and reduced operating losses from snus and nicotine pouch products outside Scandinavia.

Swedish Match estimates that its underlying volumes on the Scandinavian market were up by more than 1 percent. Swedish Match estimates that the total Scandinavian snus market grew by close to 4 percent in volume terms.

In Norway, the plain packaging regulation has been in force since July 1, 2017. New products launched after that date need to be in plain packaging. Products on the market prior to July 1, 2017 are required to be in plain packaging in the trade from July 1, 2018.

In Scandinavia, the operating profit grew primarily on higher volumes and improved average price. In the US, sales in local currency for moist snuff declined on lower volumes, while operating profit improved on higher average price and favorable production costs. For snus and nicotine pouches outside Scandinavia, both sales and gross profit increased.

See financial tables by product area for more financial information.